Sweetwater Bakery has been using a forecast model for two years to predict quarterly sales and now decide to test it using MAD and a tracking signal. Moreover, they want your help in developing a new forecasting model that takes into account the seasonality in sales and any detectable trend. You believe there is a seasonal factor associated with quarterly sales. Here is quarterly data from the past two years.
Questions:
a) Find the tracking signal. Is the current forecasting routine acceptable?
b) Prepare a forecast for the upcoming year using decomposition.
Please show calculations wherever required.
- Attach File
|
Period
|
Forecast
|
Actual Sales
|
Period
|
Forecast
|
Actual Sales
|
|
Quarter 1
|
250
|
300
|
Quarter 5
|
400
|
416
|
|
Quarter 2
|
500
|
540
|
Quarter 6
|
800
|
760
|
|
Quarter 3
|
950
|
885
|
Quarter 7
|
1100
|
1191
|
|
Quarter 4
|
650
|
580
|
Quarter 8
|
800
|
760
|